BRASILIA Reuters - Brazil's government estimates on Thursday it will post a primary surplus this year, the first since 2013 with public accounts benefiting from booming tax revenue and hefty dividends from state-owned companies.
The Economy Ministry forecast a 13.548 billion reais $2.63 billion primary budget surplus for the central government, which includes Brazil's Treasury, Central Bank and Social Security, as reported on Wednesday.
The primary deficit of 59.354 billion reais was seen in July and an official deficit target of 170.5 billion reais for 2022, which is a stark contrast to that of the number of 59.354 billion reais in July.
The government has increased estimated net revenues by 69.9 billion reais, compared to the calculations made two months ago, forecasting a more robust tax collection and additional 25.6 billion reais in dividends.
The rise in oil prices after the Ukraine war pushed dividends from state-controlled oil company Petrobras, which saw its profit go up.
The economy minister Paulo Guedes believes that revenue improvement responds not only to the spiking commodities but also to the reforms carried out by the government, which lowered the unemployment rate and attracted more private investment.
The government said in the report that they need to freeze an additional 2.6 billion reais in expenses to comply with the constitutional spending cap.
The details of the cuts will be formalized at the end of the month, adding to pressure on President Jair Bolsonaro, who is trailing in his re-election campaign against leftist rival Luiz In cio Lula da Silva ahead of an Oct. 2 vote.